The bond market is sending a loud signal: There’s a recession on the horizon.
Yields on 10-year U.S. treasuries have fallen below yields on three-month government notes. With yields on the 10-year at 2.245%, and yields on the three-month at 2.369%, the current yield gap is the widest it has been since 2007. Such “inversions” are worrisome since the only reason investors would pay less for short-term bonds than long-term ones is if they fear the future is bleak.
Bond prices and yields move in opposite direction, and investors have sent bond prices soaring (and yields falling) on fears the economy is slowing and the U.S.-China trade war will drag on. Those same fears have caused the stock market to slump…[READ MORE]